3

a)

b)

What is the value of a stock that will pay a dividend in Yc 1 of $7.50 per share and then increase dividends 4% per year, assuming a discount rate of 12%? a. $58.33 b. $33.58 C. $49.00 d. $93.75 If the market share price of a company's stock is $980 and that company pays annual dividends of $34.75 per share with no expected increase in dividends, what is the company's cost of equity capital? a. 3.07% b. 13.33% C. 3.55% d. 3.68% If the dividend yield for year 1 is expected to be 13% based on a stock price of $55, what will the year 7 dividend be if dividends grow annually at a constant rate of 4%? a. $4.25 b. $9.05 $4.09 c